Money News: Meredith Whitney Reverses Citigroup Call, Upgrades Stock Pick

April 18th, 2012

Money News
18 Apr 2012
By Forrest Jones

Star Wall Street analyst Meredith Whitney is reversing the one call that made her famous in 2007 — she’s upgrading her recommendation on Citigroup, a sign the financial crisis and overall economic weakness could finally be a thing of the past.

Whitney notched up her Citigroup recommendation to hold from underperform, CNBC reports

In 2007, Whitney predicted the subprime mortgage mess would force the bank to cut its dividend to raise capital, making a spot-on call that gave her rock-star status among equity analysts after initially receiving heat for making the prediction.

In January of 2008, Citigroup cut its dividend and the stock would eventually lose more than 95 percent of its equity value until government support would prop it back up.

“C shares continue to trade well below tangible book value (70 percent), despite relatively lower mortgage and European exposures than its large-cap bank brethren,” Whitney, who founded Meredith Whitney Advisory Group in 2009 after leaving Oppenheimer & Co., writes in a note.

Market observers welcomed the call.

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